I am sharing some of the Recently Asked Questions that I have received from clients and other consultants.
Question: Is it appropriate to include a 1099/consultant (without being an LLC nor being incorporated) using a Social Security Number for our Small Business Subcontract reporting in System for Award Management (SAM)?
Answer: It depends. Yes, if the consultant is an independent contractor(s) and does the following:
- Gets a Dun & Bradstreet (DUNS) or (D&B) number
- Registers in System for Award Management (SAM)
- Follows the regulations to register as a small disadvantaged business
- Completes their Reps & Certs in SAM, identifying themselves as a Women-Owned Small Business (WOSB), Service Disabled Veteran Owned Small Business (SDVOSB), etc., and
- Provides you a copy of their final Reps & Certs.
If the consultant has not followed all of these requirements, it is up to the Small Business Administration’s (SBA) discretion if your company is audited.
A company must have a D&B number in order to be entered into the Individual Subcontract Report (ISR) and Summary Subcontract Report (SSR)–Small Business Reporting requirements in SAM. Therefore, if the 1099/Consultant does not at least have a D&B number, it’s a non-issue because they cannot be entered.
If your contract has an ISR requirement, the timeline to enter the information in SAM is April 1-30 with some possible exceptions. Check your Contract.
Question: How can I determine if my organization is a small business?
Answer: To be considered eligible to bid on Small Business set-aside opportunities for the government, you must adhere to the industry size standards by the Small Business Administration for the NAICS (North American Industry Classification System) code. Each solicitation gets issued under a specific NAICS code. NAICS codes are reviewed every five years (in the years ending in ‘2’ or ‘7’) and updated in accordance with economic conditions. You also must register your business as a government contractor in the System for Award Management (SAM) and self-certify your business as small. For some of the other disadvantaged certifications, a more formal process is required.
On a related note, I discovered that one of my clients received a contract from the FBI in which the incorrect size standard was determined. The size was determined by number of employees when it should have been based on revenue. It was not a small-business set-aside, but confused my client when the NAICS code showed up on a solicitation with a different size standard. (They incorrectly thought they were a small business.)
Question: Does the FAR specify whether or not companies can keep electronic employment files versus paper files?
Answer: The FAR’s direction on this says in part:
“…Original records need not be maintained or produced in an audit if the contractor or subcontractor provides photographic or electronic images of the original records and meets the following requirements:
- The contractor or subcontractor has established procedures to ensure that the imaging process preserves accurate images of the original records, including signatures and other written or graphic images, and that the imaging process is reliable and secure so as to maintain the integrity of the records.
- The contractor or subcontractor maintains an effective indexing system to permit timely and convenient access to the imaged records.
- The contractor or subcontractor retains the original records for a minimum of one year after imaging to permit periodic validation of the imaging systems.”
See Far Part 4.7 Contractor Records Retention for the complete clause.
Let our experts guide you through your questions, contact Streamline.
This blog is for informational purposes only. None of the content is, or will be deemed to constitute legal opinions or legal advice.